Here is a report on the recent AIPPI UK meeting on EU trade mark reforms, prepared by Alex Woolgar (an Associate in the IP Litigation Department of Allen & Overy LLP).  This event, which was supported by the participation or attendance of a number of MARQUES friends and members, is part of an extensive ongoing process of spreading the word concerning the new EU Trade Mark package -- a process in which all major national and international organisations are engaged.  The report reads as follows:

* Removal of the requirement for graphic representation (from 1 October 2017 in relation to EUTMs; deadline for implementation of new Trade Marks Directive into national law is 23 March 2019):  Currently 3D shape marks and colour marks account for less than 0.5% and 0.05% of applications, respectively.  However, with this change, it is presumed that these figures are set to increase.  The new Article 4(b) essentially codifies the Sieckmann criteria.  Prof. Dinwoodie’s view was that the trade mark application in Sieckmann (and those in the subsequent Libertel andShield Mark decisions) failed not because the representations in question were not graphic, but because they did not meet the Sieckmann criteria.   Will Article 4(b), therefore, really represent a liberalisation in the previous graphic representation requirement?  Disposing of the requirement for graphic representation will open up registration of some new subject matter, such as sound marks which are not musical (e.g. the roar of Leo the Lion, of MGM fame – a perfect Kat-friendly example).  It will also provide greater certainty as to what is protected – there are some marks which can and should be represented more precisely by non-graphic means (e.g. sound and video recordings).  This does not, however, address the issue raised by the 2011 Max Planck Institute study of the inconsistency between national trade mark offices in examination of non-traditional marks.  Arguably, as a technical matter, the requirements for examination of national marks by national trade mark offices should in fact be fully harmonised.  David Stone noted that the EUIPO is expected to produce guidance as to the technical requirements for new forms of representation; presumably national trade mark offices will glance through this guidance before the floodgates open.  Thinking ahead, Mr Justice Arnold noted that these guidelines will need to kept updated to account for the eventual obsolescence of technological forms, such as the entire electronic medium.  Yikes.  

* Restrictions on expanded functionality (from 23 March 2016):  The amendment of Article 7(1)(e) addresses the concern raised in the Max Planck study that the expansion of registrable subject matter may enable trade mark applicants to gain a larger monopoly than would be intended, or fair.  Examples (from the United States) included the colour black for outboard engines for boats (it makes engines look more slimline, and is apparently easy to match with a wide range of boat colours), and peach and white for prescription medicines (used to denote dosage, such that a monopoly over this colour combination would pose a risk to patient safety).  The solution is to bar registrations for “another characteristic” (aside from shape) which results from the nature of the relevant goods, is necessary to achieve a technical result, and/or which gives substantial value to the goods.  Prof. Dinwoodie’s view was that this change will affect little in practice.  The needs of competitors are already taken into account under Articles 7(1)(b) and (c): for non-conventional marks, it is harder to show inherent distinctiveness in order to get them on the register in the first place.  For example, the EUIPO already expects that, to not fall foul of 7(1)(b) and (c), a 3D shape mark must depart significantly for the norm or customs of the relevant sector.  On the other hand, the new Article 7(1)(e) could have unintended negative consequences.  For example, the Coach “C” pattern is not a shape, but it is “another characteristic” and it does give substantial value to the luggage produced by Coach.  Is it possible that this type of mark would now be vulnerable?  Simon Malynicz QC and David Stone agreed that over recent years, shape marks have had a tough time, both during examination and in the courts.  If this theme continues in relation to other non-conventional marks, this could be quite restrictive, especially as in the case of Article 7(1)(e) there is no opportunity to save a mark through use.  It appears the amended Article 7(1)(e) will apply immediately, including to existing marks (there are no transitional provisions).  This was the view of Mr Justice Arnold, although Prof. Dinwoodie argued that German courts are likely to  be more receptive to Article 1 of the ECHR Protocol (protection or property) arguments and may take a different view. The new Trade Marks Directive is likely to be sufficiently clear and certain to be directly effective if not implemented by Member States by 23 March 2019.    

* IP Translator:  The new Article 28 codifies the IP Translator decision.  The transitional period for amendment of specifications will last until 23 September this year.  This offers an opportunity for the owner of a trade mark with a deficient specification to gain extra protection by amending the specification to claim the full range of goods/services within the relevant class(es).  There is a risk, however, that some “orphan”  goods/services will be vulnerable to revocation for non-use.  The process of checking a specification against various editions of the Nice Classification, and then updating, is laborious.  It is questionable whether this will be worth the effort unless a specification is materially deficient.  As Simon Malynicz QC noted, it may also be problematic for trade mark owners to certify that they always intended to claim protection under the relevant orphan headings. 

* Certification EUTMs (from 1 October 2017):  Simon Malynicz QC lamented the missed opportunity to fully harmonise overlapping EUTM and national trade mark laws. Although Article 74a of the Regulation will provide for certification marks, marks indicating geographical origin are excluded.  This contrasts with section 50 of the Trade Marks Act 1994 (which permits the registration of marks which certify origin), which should remain unchanged by the new Directive.  In theory, a holder of a national certification mark for geographical origin will be able to block registration of an EUTM, which seems unfair.  It is debatable whether the new Article 74a will save Simon’s favourite Halloumi cheese, direct from Cyprus (and Cyprus alone…)

* Infringement (from 23 March 2016):  Simon Malynicz QC commented that (with a couple of exceptions) the changes to infringement provisions do not, in practice, significantly benefit trade mark owners.  In particular:

• The wording of new Article 9(f) is unclear – like Simon, this author had previously thought of comparative advertising as a defence if a prima facie infringement case is established, not an infringing act per se.  On balance, Article 9(f) is probably a victim of poor drafting and there was no intention to shift the role of comparative advertising.  Instead, the better view is that it merely codifies the decisions in O2 v Hutchinson 3G,L’Oréal v Bellure and Google France. 
• Most seemed to agree that new Article 9(4) is overdue, and that it represents a significant win for brand owners.  Even if imported goods are labelled for on-export, if they bear a mark which is identical to an EUTM or indistinguishable in its essential aspects (note the test for similarity differs from Article 9(2)), the importer will be required to prove that the trade mark holder would not be able to stop the goods being placed on the market in their final destination.  It was noted that this new provision will probably just result in counterfeit goods being labelled for on-export to countries which do not provide for protection of trade marks   There is also some confusion as to whether this Article will catch parallel imports (which often enter the EU via similar channels) – Prof. Dinwoodie agreed that this is possible.  There is interplay here with the Customs Regulation, and the question of intent will be important.  
• New Article 9a on preparatory acts will tighten the net around those who assist infringement.  Simon recalled a case for Coca-Cola before Mr Justice Henderson (unreported) in which a counterfeiter produced fake Coca-Cola syrup and used a stock of existing, genuine Coca-Cola packaging boxes to wrap the counterfeit product.  There was a debate on whether just wrapping the fake syrup with real packaging constituted an infringement.  Article 9a now deals with that question by prohibiting (in the course of trade) the affixing of signs to packaging and other materials, or offering or placing on the market such packaging or other materials, where such materials could be used in relation to such goods and services and such use would constitute trade mark infringement.  Mere filling of infringing cans by a bottler would now be caught.  David Stone commented that even if the Red Bull case was decided correctly on the words of the Regulation, it was a poor policy decision – rights holders need to be able to get relief against whoever is in front of them in the relevant jurisdiction.  Simon Malynicz QC noted that the drafting of this Article is extremely broad, and could prohibit legitimate activities that should not be infringing.   
• The removal of the own-name defence for non-natural persons is a significant change, especially in the UK where there have been several successful own-name defences by companies.  This change also runs contrary to two CJEU Grand Chamber judgments (Anheuser-Busch and Celine) and is not supported by the Max Planck study.  Simon Malynicz QC was therefore expecting a good explanation from the Council addressing the reasoning behind this change, but none has been forthcoming.  Simon stated that he supports the current position in the UK, where the availability of the defence hinges on honest practices.  In cases of double-identity, this may well be the only defence available.  Simon referred to one of his cases (which settled before trial) in which Kindle Entertainment, a production company, relied on this defence against the marks for Amazon’s “Kindle” e-reader.  Kindle Entertainment chose its name before launch of the Amazon Kindle, and had run an clearance search on the Internet, but no trade mark search.  There was lively debate as to whether failure to run a trade mark search can still be “honest practices”.  This author suggests that it would be quite unfair to small companies, with limited resources for trade mark attorneys and clearance searches, if an “honest” failure to pursue every search avenue could be deemed as “dishonest”.  It was also suggested that if the court is sympathetic to a defendant, it will make efforts to find another defence (e.g. honest concurrent use), even though this isn’t meant to be a defence (but, as Mr Justice Arnold pointed out, it was upheld as such inSupreme Petfoods).
• The non-distinctive signs element of Article 12(1)(b) appears to be an attempt to deal with signs which are not non-descriptive as such but still non-distinctive.  Examples might include Kit-Kat bars and the “figurative figleaf” problem identified by Mr Justice Arnold in Starbucks v BskyB. This defence will be particularly important for composite marks: it should not be possible to base an infringement action on an otherwise non-protectable component of a composite mark.
• To complement Article 9(f), the wording of the revisions to Article 12(1)(c) is unclear.  Does this represent a third stage to the comparative advertising analysis (see above) i.e. the use of the mark also has to be in accordance with honest practices for a comparative advertising defence to apply, or is this defence a trump card which circumvents the Comparative Advertising Directive?  This question was not resolved.  Mr Justice Arnold suggested it could be that if the defendant has a comparative advertising defence, then the use of the trade mark must by default be honest; if not, the use must not be honest. This seems attractive, and refreshingly simple, but no doubt there will be plenty of arguments about this in practice in due course.  

* There was some confusion as to why the Regulation is devoid of transitional provisions.  The panel was in the dark about this, as was the audience.  Simon Malynicz QC suggested that in the case of the “declaratory” aspects of the Regulation and Directive (those which arguably just codify what the law already is e.g. the amendments regarding graphic representation and comparative advertising) it is possible that the courts of Member States should already be giving effect to these provisions in their judgments.  This author watched Mr Justice Arnold carefully for a reaction to this suggestion but, alas, any reaction was imperceptible.